China growth rate to ‘stay above 6.5pc’ mark

Zhong Nan and Li Xiang

New report is bullish on China’s economic growth rate, and says export volume will grow by 9.65pc in 2018

China is likely to maintain a steady growth rate of above 6.5pc in two years, with economic deleveraging and preventing financial risks the top priorities for the government, a report said.

The report, jointly released by Xiamen University and business newspaper Economic Information Daily, forecast that China would achieve a growth rate of 6.73pc this year and would see slightly slower growth of 6.6pc in 2019.

The country will also see mild growth in inflation with the consumer price index, a main gauge of inflation, reaching 2.13pc. Policymakers are capable of keeping prices within a reasonable range and there is no major inflation risk in the country, the report said.

“China’s economy will be transformed from old to new by involving innovation and supporting policies, by how structural transformation can be promoted in more places, how new technologies, industries and formats can be continuously conducted and changed in various sectors,” said Zhang Yansheng, secretary-general of the academic committee of the National Development and Reform Commission.

Economic growth can only be stimulated if consumption can be expanded to boost industrial productionWang Tongsan, economist, Chinese Academy of Social Sciences

“If we can manage to maintain high investment activities in innovation activities in 10 or 20 years and the stocks have accumulated to a certain extent, the world’s top universities and more competitive industries will surely emerge here,” he said.

China’s economic growth beat forecasts to reach 6.9 per cent year-on-year in 2017, marking the first acceleration since 2010 despite financial regulatory tightening and measures against pollution that affect growth.

Thanks to global economic recovery and rebounding demand for goods in 2017, the report predicted China’s export volume would grow by 9.65pc in 2018, about 1.75 percentage points up from the previous year.

The report also urged the government to pay more attention to consumption that can result in investment, as well as boost sustainable industrial production.

Wang Tongsan, an economist with the Chinese Academy of Social Sciences, a government think tank, said: “Consumption drives economic growth by leading investment. Economic growth can only be stimulated if consumption can be expanded to boost industrial production.”

Li Jianfa, professor and vice-president of Xiamen University, said despite the steady growth of China’s economy and benefits from rising demand for foreign goods in 2017, the country still needed to resolve issues such as falling growth rates of fixed assets, unbalanced investment structure and declining investment efficiency.

Even though the steady trend of industrial production could be maintained, Li said there had been no obvious increase in the growth rate of private investment. The government still had to rely on infrastructure investment and strengthen investment in state-owned enterprises at all levels in relevant monopolies.

This article was originally produced and published by China Daily. View the original article at www.chinadaily.com.cn